ER ‘saved’ by Classic Media founders

Entertainment Rights has gone into administration, announcing the sale of its UK and US subsidiaries to Boomerang Media, a US group set up by the founders of its subsidiary Classic Media.

The news follows a tumultuous past six months for the company, including an asset sale and job losses as part of its plan to reduce debts of up to £127m (US$183m), largely incurred after it acquired US firm Classic Media.

In an announcement to the City of London today, ER said: “Despite the financial support of the group’s lender, the group has been unable to achieve a solvent restructuring of the company.”

ER said it has appointed administrators Nicholas Guy Edwards and Carlton Malcolm Siddle of Deloitte with immediate effect.

US IP firm Boomerang Media, managed by Eric Ellenbogen and John Engelman, founders of Classic Media, has bought the existing shares in ER subsidiaries Entertainment Rights, Classic Media and Big Idea. The firm is being backed by Chicago-based private equity group GTCR.

The acquisition of ER’s properties, including He-Man, Casper The Friendly Ghost and Postman Pat, is the first major transaction for the group. In partnership with GTCR, they plan to invest US$200m in equity capital in ER’s franchises.

“The sale secures the ongoing activities of the group’s trading subsidiaries, allowing the former businesses of Entertainment Rights to survive under new ownership. The new owners have indicated their intention to invest in the business to further develop its strong portfolio of intellectual property,” ER said today.

Previously, potential buyers mooted included Chorion, the literary rights company owned by multimillionaire Labour Party peer Waheed Alli, and private investment firm 3i, as well as US-owned Hit Entertainment and Italian media giant De Agostini.

Deborah Dugan, CEO and president of Entertainment Rights, said: “John and Eric have exceptional track records in entertainment, not to mention a history with most of the company’s leading brands. Backed by GTCR’s successful history of building industry leaders, the company is poised for its next phase of growth.”